Even beyond the controversies involving human cloning, there are risks and ethical dilemmas surrounding the use of transgenic and cloned animals.

One risk from cloning animals is a loss of genetic diversity in livestock. This could result in increased susceptibility to disease or other environmental challenges. Some of this risk might be avoided, according to the Roslin Institute, by systems that limit the number of clones produced by breeders and restricting the number of clones sold to any given farmer.

The overexpression or deletion of certain genes must also be evaluated from an animal welfare perspective. The secretion of proteins in the milk of transgenic goats seems to have no ill effects. However, pigs that harbor foreign genes have exhibited many problems including lameness, lethargy, thickened skin, kidney dysfunction, inflamed joints, peptic ulcers, pericarditis, severe osteoarthritis, and a propensity toward pneumonia.

The safety of cloning techniques has been questioned by a number of researchers. Rudolf Jaenisch (MIT) published a study in September 2002 comparing 10,000 genes from placentas and livers of newborn cloned mice with those from normal mice; at least four percent were functioning incorrectly. Cloned mice have exhibited developmental abnormalities, obesity, pneumonia, liver failure, and premature death. Dolly exhibited arthritis at an unusually young age and was put to sleep at age six, about half the life expectancy of sheep in captivity.

An additional concern about the use of transgenic animal products, including transplanted organs, is the risk of human exposure to animal pathogens. At least 150 pathogens are known to infect both humans and some other animal. In 1997 the isolation of two retroviruses from pigs that could infect human tissue culture cells was reported. These so called PERVs (porcine endogenous retroviruses) are of special concern to those considering the use of porcine tissue for transplants, especially because some retroviruses have been associated with cancer.